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Monday, 23 May 2011

Innovation - Pull or Push?

Formula 1 Regulation changes are made in order to drive innovation and create competition to ensure the requirements of the users (us the public) are maintained (or more simply to keep us glued to the screen to watch the next season!). The FIA continues to adapt and refine the regulations and design criteria, this is done EVERY Year. Now consider for a moment our own technology markets, there are no changing rules (ok the occasional intervention by the regulatory body to ensure some form of “parenting” is in place to “protect” the end consumer.), there are no demands on how we must run a certain technology, of course if they ever did we all gasp in horror and demand immediate justice! Right?  … So is this an article about technology regulation? Absolutely Not! There are far smarter people than I to have that discussion, what I would like to discuss is the importance of adaptability to Innovation. Phew that took a while but ok now we are finally here.
I stand in admiration of Formula one team's who manage to build a brand new Formula 1 car every year, despite the continuous changes they are asked to adapt to. Take this year for example, A Kinetic Energy booster has been allowed, OR an additional weight of 25kg, a movable rear wing, new tyres which fall apart after 15 laps, changes to the dimension of the cars (again), and the list goes on. Now I can hear you thinking so they are Formula 1 teams that is what they do … right? Now consider the technology space, what if Regulators suddenly decided that the frequency used by mobile operators or the signalling in Networks would be changed from year to year, or even better policy for Voice handover or that Network interconnects had to offer the end user a choice of which network they could roam onto using a NEW Internet Protocol (for the techies out there and no I am not plugging IPv6.)
How long would it take for the technology industry to adapt? 6 months? A year? Longer? Consider the upheaval that Millennium Bug brought about, these were transformational programs and I am sure many businesses internally are hoping not to have to do that again! I have read with some interest the articles posted by Technology magazines that Telecom operators need to change their business models, I would challenge though that the Technology industry as a whole needs to consider new ways of working AND new business models.
The world around us is changing and the ability to adapt to that change will be crucial, I believe that the next two to three years will see innovation cycles significantly reduced as start-up and entrepreneurs alike find new vehicles to leverage and introduce their product/solution/idea to the market. The world we live in is digitally smaller than it has ever been with our friends, colleagues and supply chain reachable through the richest and most diverse communication mediums ever seen.
Change is upon us, it is now a question of when we will notice and how we respond, we are currently in a Push frame of mind when it comes to Innovation Acceleration, we need to start adapting for a new wave of Innovation which will “Pull” businesses kicking and screaming, to the point that for many organizations it will be a case of Adapt or Die, which do you choose?

Thursday, 19 May 2011

An Acquisition too far?

Before anyone asks no- this is not to do with Anzac day or any linkage to a movie, this is all to do with need to change the business model to meet the needs of the customer. Traditionally we have seen businesses leverage an ecosystem for those elements that were regarded as being out of reach of their business model or simply deemed too unique to replicate. I mention this because some large global technology companies have looked at these Ecosystem’s to define their acquisition strategy to ensure they could truly meet the holistic requirements of the customer. Some of these leading technology businesses truly excel at technology acquisition to the point that I have stood with admiration at their aggressive approach to ensure accelerated integration in order to maximize the investment made.

Interestingly we are now seeing that some of these global technology companies are reassessing their portfolio’s as they begin to realize the “All things to All people” is increasingly impossible due to the acceleration of the Innovation curve (I have mentioned this in a previous article), the time line between the innovation leaders and the laggards and the resulting long tail has dramatically shortened from years to – in some cases – months. This significant shift in the innovation cycle has meant the ROI period that businesses could normally consider for an acquisition is now considerably shorter. Hence the traditional Ecosystem is potentially feeling left out in the cold as what was once used to look at for acquisitions is now increasingly regarded as risky and more likely to be replaced by a more recent solution than ever before.

However I believe that the business ecosystem is finally about to fulfil its true potential and in doing so become an innovation and business enabler to all. Let me explain, many businesses have always looked at the Ecosystem as a means to deliver a wider breadth of services to their customers and when significant opportunity arose, establishing close working partnerships or potential acquisition/merger discussions. However what some companies have now realized though is that in attempting to meet the ever evolving needs of their customers, they have lost the focus on their core capability, what is their DNA as opposed to the consolidated DNA of others.

What are we known for? What are we great at? Which partners can we work with to be even greater in the eyes of our customers? All of these questions will assist in redefining the role of an ecosystem to strengthen a particular business capability as opposed to seeking to merely add another service offering. Businesses need to first understand what they are or can be great at and then define the limits of that focus and only then to consider how they strengthen that capability through partners. The addition of any partner should have one purpose, make your offering even better, not necessarily broader.

But what brought this about; I mean everything was moving to IP right? It was to be the ultimate convergence of networks, services and platforms all onto one common infrastructure, surely this was always going to lead to large technology firms offering a broad selection of offerings. However the convergence to IP has introduced a whole new suite of products and services, think about the Enormous choice of Communication and Business tools available today through Application stores, Social Networking and even Vendors, I am not even talking about your traditional Service Provider or Online portal, who have again their own unique offerings. Now Many traditional technology businesses see these changes as threats and will seek to confront them, but consider Sun Tzu’s famous phrase “The Enemy of my Enemy is my Friend”, are these new wave businesses really a threat or have they found a niche which they can serve better than anyone else and through partnership or a broader richer ecosystem could actually strengthen your own offering. This type of partnership would then allow your business to lead your market competitors delivering you growth and recognition as a business innovator through adapting to the new world and … for me the time of Acquisitions solely for business expansion is coming to an end, the acquisition will still be there in the form of strengthening a business’s own core capabilities, however the focus will shift to Ecosystem’s to provide a new way of working, an exciting time and opportunity for all of us. We can cross that last bridge, but it will be in order to get to the other side in one piece and stronger than when we started the Business Ecosystem will be the key.